Related Topic : Econonmics What is Market Discrimination Explain Coub douglas function clearly with equation

Market Discrimination means charging different price for the same product to different costumers For e.g. Let there is a product A in the market so if the seller charges more price to an individual or a group and less price to another individual or group then it is known as price discrimination. The Cobb–Douglas production function is a particular functional form of the production function, widely used to represent the technological relationship between the amounts of two or more inputs, particularly physical capital and labor, and the amount of output that can be produced by those inputs. In its most standard form for production of a single good with two factors, the function is Y=AL^{\beta}K^\alpha where: Y = total production (the real value of all goods produced in a year) L = labor input (the total number of person-hours worked in a year) K = capital input (the real value of all machinery, equipment, and buildings) A = total factor productivity ? and ? are the output elasticities of capital and labor, respectively. These values are constants determined by available technology. Output elasticity measures the responsiveness of output to a change in levels of either labor or capital used in production, ceteris paribus. For example if ? = 0.45, a 1% increase in capital usage would lead to approximately a 0.45% increase in output. Further, if ? + ? = 1, the production function has constant returns to scale, meaning that doubling the usage of capital K and labor L will also double output Y. If ? + ? < 1, returns to scale are decreasing, and if ? + ?> 1, returns to scale are increasing. Assuming perfect competition and ? + ? = 1, ? and ? can be shown to be capital's and labor's shares of output. Cobb and Douglas were influenced by statistical evidence that appeared to show that labor and capital shares of total output were constant over time in developed countries; they explained this by statistical fitting least-squares regression of their production function. There is now doubt over whether constancy over time exists. read less

It is mentioned as Cobb Douglas production function. Not "Coub" It measures the relationship of output production in an industry to the values of input of the factors of production. The four factors of production are Land, labor, Capital, and Organisation. Since Capital and labour are more flexible and subject to continous change, usually Capital and labour are considered in the Cobb - Douglas Production Function. The function is a measure of amount of Capital and labour input to the amopunt of production output and is given by Y = AL beta K Alpha Where Y = Value of goods produced in a year A = Total Factor Productivity L = Labour Input K = Capital Input Beta = Elasticity of Labour Alpha = Elasticity of Capital read less

Charging different prices for different customers is called Market Discrimination. Coub -Douglas Function :- Mathematical Expression of Production and Utility Functions through graphs. Production Function :- Q= K* L ( 1-* ) Q is Out put K is Capital L is Labour and " *" is beta Utility Function :- U = X * Y (1-* ) U is Utility X and Y are different goods. "*" represents beta read less

Charles W. Cobb and Paul H. Douglas studied the relationship of inputs and outputs and formed an empirical production function, popularly known as Cobb-Douglas production function. Originally, C-D production function applied not to the production process of an individual firm but to the whole of the manufacturing production. The Cobb-Douglas production function is expressed by Q=AL?K? where Q is output and L and A’ are inputs of labour and capital respectively. A, ? and ? are positive parameters where ? > 0, ? > 0. The equation tells that output depends directly on L and K and that part of output which cannot be explained by L and ? is explained by A which is the ‘residual’, often called technical change. The marginal products of labour and capital are the functions of the parameters A, ? and ? and the ratios of labour and capital inputs. That is, MPL=?Q/?L = ?AL ?-1K ? MPK=?Q/?K = ?AL ?K ?-1 The two parameters a and P taken together measure the degree of the homogeneity of the function. In other words, this function characterises the returns to scale thus: ? + ? >1: Increasing returns to scale ? + ? =1: Constant returns to scale ? +? <1: Decreasing returns to scale. Although the ?-D production function is a multiplicative type and is non-linear in its general form, it can be transferred into linear function by taking it in its logarithmic form. That is why, this function is also known as log linear function, which is Log Q = log A + a log L + p log K It is easier to compute ?-D function when expressed in log linear form. read less